renew current tenant??

General Landlording & Rental Properties
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renew current tenant??

Douglass Belt
Investor · Madison, WI · Member since 2013 · 97 posts · 10 votes

I have a SFH (in another state from which I live) which has been rented to the same tenant for two years. Single mother, 1 child. the lease comes due this summer, and wondering if I should renew her or look for someone else. Never had an issue with renting-near many colleges, and businesses. She has done a good job taking care of the house, has fixed things on her own, landscaped, painted, installed new ceiling fans, etc. and not a tenant who will call me "for a plugged toilet" as she can fix that on her own. She is pretty handy with many things. She is on time with rent and for the most part pretty quiet. the down side is I think she has some emotional and/or psychological problems, as once and a while she will flip out. For instance, when she found a drip in the basement (caused by condensation on a pipe during the summer), called me telling me there are pools of water, called the fire inspector, and housing department, etc. as you can imagine it is quite a ordeal. That was just one of a few incidents. As I am not able to just drive over, (250 miles away) it is not easy to just fix it or know what is really the truth. These "flip out" sessions happen once and a while and causes major headaches. It is hard to deal with her, as you never know who you will be dealing with on the phone...the "nice" tenant or the "I-am-going-into-panic-mode" tenant.

What are your opinions on having her stay. On one hand, it would be nice to have her there, no move out, cleanup, showings for prospective renters, etc. and on the other, it may be nice to get someone else in there that is more "stable" mentally.....any thoughts, suggestions?

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Marcia Maynard
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
12y

Douglass, as to your other question... Here's my take on obtaining work-life balance.

As you are experiencing, it can be a challenge to juggle the demands of FAMILY, PROFESSIONAL WORK and LANDLORDING.... To do so, my husband and I take a retreat together at least once a year to discuss our real estate investment goals and plan for the coming year, as well as ten years out. We are partners in life and partners in real estate investment. We each have our own professional full time careers and I am trustee/caregiver for my 94 year old mother. Although I am more involved in the property management aspect than my husband, he contributes in other ways that utilize his talents. It was he who got us started on this path and I thank him for his vision.

In the early years there were times when I wanted to throw in the towel and sell the rentals because it was taking a toll on our relationship. Then we started setting up systems to handle the work load. We made sure we had adequate cash reserves and adequate outside help. Thus reducing the two biggest stressors. We became adept at understanding human behavior and tenant mentality. We approach our business with a service attitude and maintain healthy respect for all of our tenants.

We took a marketing class and established a mission statement and values. With those we were re-energized with a sense of purpose. Everything changed for the better. Eighteen years later, we now have 15 rental units (6 paid off already) and are looking to expand. When people ask what we do, we can say with pride... "We strive to provide safe, clean, affordable, comfortable and quiet housing for responsible renters in the neighborhoods of west Vancouver." That is our guiding light.

So, I recommend you take your wife out to dinner and plan a retreat where you two can focus on your values and dreams. See if you both can get behind this real estate adventure as partners with a sense of purpose. Investing now, rather than later is great if you can do it without jeopardizing your family needs.

All the best to you!

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  • Chris Sweeney
    Real Estate Investor · Austin, TX · Member since 2011 · 271 posts · 106 votes
    12y

    I tried to keep her. She has lots of pros that you may lose with a more stable tenant and going vacant costs money and is never fun.

    You may want to draft an addendum with the extension detailing the process for handling her "flip out" moments. It will probably be redundant to the lease. You could consider property mgmt. or at least someone to be the punching bag until you wake up the next day.

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  • Gerald Harris
    Investor · Atlanta, GA · Member since 2013 · 922 posts · 336 votes
    12y

    She sounds like a dream tenant most of the time. But you have to endure the nightmare of those sessions. Personally this is what I would do. a month or 2 before you renew her lease, you have to make the 250 mile drive and take her out to dinner.

    If you feel comfortable, you and your wife take her to dinner. Let her know you appreciate her presence at your property. Compliment her positive qualities. As dinner goes on, let her know your concerns about her "flip outs".

    Tell her that you want a positive and uplifting relationship with her. If you to can take care of that face to face and have a verbal or written agreement about the "Flip outs" she will appreciated it.

    The "flip outs" are a cry for help. Help her by listening, and give her positive reinforement. If all is well and on the up and up, extend her a 6 month to 1 year lease. She doesn't want to leave. Remember, she has a child. That child is her life. Speak highly of the child. point out some positives.

    Remember: "Compliment her strengths and uplift her short comings".

    Truth be told, there are many landlords who would love a tenant like this when she is in her right mind.

    Good Luck to you

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    12y

    You probably need to analyze what troubles you about the flip-outs. What makes these calls different then other complaints and deal with that behavior. For the one incident it sounds like she called in a lot of people to deal with it and that was a problem for you. It also sounds like they were not even the right people. Also how frequent are the incidents?

    If the incidents are often it would be better to not renew but if they are manageable you might outline guidelines for how to deal with what she considers an emergency situation. Call you, send pictures. call the fire department immediately only in case of fire or gas leak and get out. If there are themes that you are comfortable to authorize her to directly deal with I would do that. So if for example the panic is about pests put pest control under contract and let her call them and notify you. It never fails to amaze me about what a tenant can't deal with or considers an emergency. They don't know to put a bucket under a leaking sink drain until the repair guy comes or what is condensation vs, a leak. Things break and you may need to go over with her what is an emergency. For example, Call me at 3 am if your furnace goes out or the water line breaks then she should be a little paniced. a face to face is probably a good idea.

    1Reply
  • Douglass Belt
    OP
    Investor · Madison, WI · Member since 2013 · 97 posts · 10 votes
    12y

    Thank you both for your insight and responses. I really do appreciate your thoughtful answers and ideas. You both bring up good points and gives me some things to consider. I like your ideas Gerald, and I do have some time to see how things go and consider having a discussion around setting expectations for the next lease term. It is difficult since she has some strong qualities, i.e. able to fix things without calling me, pays rent on time, friendly with neighbors and generally has improved the property, landscaping, etc. However, she also has times where she tends to freak out and I am unable to rationalize with her as she gets so wound up. At any rate, you both bring up good points, which again, I truly appreciate you taking the time to write thoughtful answers!!

    0Reply
  • Sharon Tzib
    Real Estate Broker · Cypress, TX · Member since 2013 · 822 posts · 468 votes
    12y

    I think most all tenant issues can be solved via a strong lease, and it sounds like this tenant has some confusion surrounding how to report problems. First, I would review your lease language and make sure it's crystal clear how problems/repairs are handled. Do you define what constitutes an emergency (fire, flood or blood)? Do you define how to report non-emergency problems and the expected time frame for the landlord to get back to her. Do you clearly state that all non-emergency repairs will be handled in a reasonable time frame?

    Then, when she has her freak outs, you can remind her to review her lease and tell her you are handling it and she needs to calm down. Prior to having her sign the new lease, I would have a conversation with her telling her that generally, you've enjoyed having her as a tenant, but you feel there have been instances where she is unclear on how problems are handled, so you want to direct her attention to the section that covers it, and tell her you've made updates (if you have), and make sure she understands going forward what is reasonable and unreasonable.

    Your other option is to just let the lease lapse into a month-to-month situation, and that way if she gets really bad, you can simply give her 30 days notice. But I still think at some point, you are going to need to have a conversation with this woman and re-train her. You are not her shrink, or her dad, or her boss - yours is a business relationship, and sometimes tough conversations are warranted, but without them, the issue will not go away.

    I echo the above commenter as well, that as an out-of-area landlord, having a property manager may be the best solution for you, since they are more than adept at handling problem tenants, and in fact, some tenants tend to act very differently with the owner of a property vs. a PM. Food for thought.

    Good luck!

    0Reply
  • Douglass Belt
    OP
    Investor · Madison, WI · Member since 2013 · 97 posts · 10 votes
    12y

    Thank you Sharon for your ideas, and I agree, I need to revisit my lease and add some of those items mentioned, including having a sit down and reestablishing expectations. The basics are outlined including a crime free addendum, etc. however, I realize I need to add to it. Would you have a sample of a lease or where I can find some verbiage or sample leases to use?? thanks again for the feedback and I share your goals of using multi-family investments to fund my retirement and travel the world!

    0Reply
  • Sharon Tzib
    Real Estate Broker · Cypress, TX · Member since 2013 · 822 posts · 468 votes
    12y

    Hey Douglass - I would ask your realtor. Most states have an approved tenant lease that they could probably provide you. Or you could check in the File Place here on BP. Or perhaps the Fair Housing division in your state would have one for you. You can also pay to have an attorney draft one, but that's the most expensive route. Usually best to have a rough draft to give to an attorney to tweak instead of having them recreate the wheel.

    0Reply
  • George P.
    Real Estate Investor · Baltimore, MD · Member since 2008 · 1k+ posts · 268 votes
    12y

    I'd renew the lease with a new clause that requires her notifying YOU first before calling any state or government agency. Explain to her that it's your job to provide her with the safe environment and that the agencies should be contacted only if she cannot resolve the issues with you.

    Tell her this is the way to handle things. And of course don't forget to mention to thank her for being a loyal tenant.

    0Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    12y

    @Sharon Tzib - the state realtor docs are usually only meant to protect the agents involved in the transaction , and not landlords.

    0Reply
  • Sharon Tzib
    Real Estate Broker · Cypress, TX · Member since 2013 · 822 posts · 468 votes
    12y

    @Steve Babiak I think it depends on the state, and I'm sure in some states, that is very true. The OP is looking for verbage examples, which is why I gave him ideas of four different places he could look. Maybe you have some ideas for him as well? Thanks!

    0Reply
  • Douglass Belt
    OP
    Investor · Madison, WI · Member since 2013 · 97 posts · 10 votes
    12y

    thanks everyone for sharing with me your insight and suggestions. Sorry it took so long to respond!! A full time job, wife and two kids will keep you busy! I try to get on the site a few times a week-thus the delay.Which actually brings up a question; How do you make time to invest in multi family units, and balance a home life and full time job? I really do not have any extra money now (it all goes to bills, etc.) to invest and feel like I am "running out of time" to invest. My wife says I should just wait until we are closer to retirement to invest, but I figure the sooner the better. It seems to me if I am in my 50-60's and just starting to invest, I will not be able to truly reap the rewards of the potential cash flow and equity from a buy &hold strategy for 2-4 unit buildings. Any thoughts?

    0Reply
  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
    12y

    Yeah, you should keep this tenant.

    When she flips out, is she insulting/rude/demanding to you? Or is it simply the panic/stress of her voice also stresses you?

    If so, I think it'll help a lot to make an effort to change your mindset. Even if she is insulting/rude/demanding as well...don't let it get to you.

    You'll have negatives of just about every tenant. But this one pays on time and takes care of the place. Keep it going! :-)

    1Reply
  • Marcia Maynard
    Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    12y

    @Douglass Belt I agree with @Nicole A. Your tenant pays on time and takes care of your property. She shows that she takes pride in her home and has made improvements that indicate she will most likely be a long term tenant for you. Sweet!

    We have a very long term tenant (26yrs) who occasionally does similar things... a result of a anxiety disorder (which is a qualified disability.) I would be very careful not to dismiss someone for the reasons you mention, as you may be stepping into the arena of discrimination. Whether her concerns are about things that are real or perceived, they were obviously real enough to her that she felt she needed to take action. Although misguided, she most likely did the best she could with the information she had. @Colleen F. made some good points for going forward. Figure out why this is troubling you. Set up parameters that will work for both of you. And get someone local to assist you when the need arises.

    0Reply
  • Marcia Maynard
    Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    12y

    Douglass, as to your other question... Here's my take on obtaining work-life balance.

    As you are experiencing, it can be a challenge to juggle the demands of FAMILY, PROFESSIONAL WORK and LANDLORDING.... To do so, my husband and I take a retreat together at least once a year to discuss our real estate investment goals and plan for the coming year, as well as ten years out. We are partners in life and partners in real estate investment. We each have our own professional full time careers and I am trustee/caregiver for my 94 year old mother. Although I am more involved in the property management aspect than my husband, he contributes in other ways that utilize his talents. It was he who got us started on this path and I thank him for his vision.

    In the early years there were times when I wanted to throw in the towel and sell the rentals because it was taking a toll on our relationship. Then we started setting up systems to handle the work load. We made sure we had adequate cash reserves and adequate outside help. Thus reducing the two biggest stressors. We became adept at understanding human behavior and tenant mentality. We approach our business with a service attitude and maintain healthy respect for all of our tenants.

    We took a marketing class and established a mission statement and values. With those we were re-energized with a sense of purpose. Everything changed for the better. Eighteen years later, we now have 15 rental units (6 paid off already) and are looking to expand. When people ask what we do, we can say with pride... "We strive to provide safe, clean, affordable, comfortable and quiet housing for responsible renters in the neighborhoods of west Vancouver." That is our guiding light.

    So, I recommend you take your wife out to dinner and plan a retreat where you two can focus on your values and dreams. See if you both can get behind this real estate adventure as partners with a sense of purpose. Investing now, rather than later is great if you can do it without jeopardizing your family needs.

    All the best to you!

    2Reply
  • Raymond B.
    FL · Member since 2009 · 2k+ posts · 357 votes
    12y

    @Douglass Belt,

    You said: I really do not have any extra money now (it all goes to bills, etc.)

    Have you and your Wife ever utilized a "30 day spending Diary?"

    It could change your Financial Status.

    Raymond

    1Reply
  • Douglass Belt
    OP
    Investor · Madison, WI · Member since 2013 · 97 posts · 10 votes
    12y

    Good Morning BP-ers!

    For what its worth, I thought I would provide an update to the post I had a few months ago about renewing my tenant. Thank you to ALL of you for providing me with guidance and advice!!

    I not only ended up renewing her lease, but she decided to pay for an energy audit to see how she can help reduce the energy consumption for the house. She provided me the results as well so I have something on file and can refer too for quick fixes. One key takeaway is that small fixes (offering to pay for new door gaskets, foam outlet inserts, and new weatherstripping) is a cheap fix and pays serious dividends towards good will, etc for the tenant.

    In addition to that, we also agreed that she will directly deposit her rent check to my bank account. It is the closest thing (That I can find) to Direct deposit for "Person to person" there is. My bank only does direct deposit for B2B or P2B. This also has been a source of improvement for the tenant and apparently hated mailing her check-so this is easier for her.

    In the business world, I have learned that to provide great customer service it revolves around 3 things: Speed, Ease, and Knowledge. The same can be applied to Real Estate Investing. Make things easy for the tenant, be knowledgable, and be fast in responses, and repairs.

    Again, thanks to the BP community, I am learning a lot and look forward to adding more properties to my portfolio

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